Microsoft Has Significant Plans for Blockchain as a Service

Microsoft has ratcheted up its effort over the past year to build out a framework based on blockchain and to participate in helping build a standards-based ecosystem. Many experts believe blockchain will transform how payments and transactions are made and it's poised to create a trusted, self-sovereign, user-managed identity framework.

Blockchain, the distributed ledger technology enabled by smart contracts that underlies bitcoin cryptocurrency transactions, has existed for a while. But over the past year, it has advanced to the point where every major supplier of IT is building blockchain-based tools and scores of major banks and financial services firms that participate in trading networks are involved in pilots. Microsoft started talking about its potential late last year and has made aggressive moves ever since, which is why it is the cover story for the July issue of Redmond magazine.

It appears blockchain is becoming more strategic to Microsoft. Marley Gray, who headed Microsoft's financial services vertical industry segment as director of technology strategy for Microsoft's financial services vertical, is now the company's blockchain business development and strategy lead.

In its latest bid to extend its blockchain ambitions, Microsoft revealed Project Bletchley, which Gray described last week in a blog post as Microsoft's "vision for an open, modular blockchain fabric powered by Azure and highlights new elements we believe are key in enterprise blockchain architecture." It aims to bring a middleware layer to its Azure Blockchain as a Service (BaaS) that he said "will provide core services functioning in the cloud, like identity and operations management, in addition to data and intelligence services like analytics and machine learning."

The other component to Project Bletchley is cryptlets, which Gray described as a "new building block of blockchain technology [that will] will enable secure interoperation and communication between Microsoft Azure, ecosystem middleware and customer technologies." Gray noted Project Bletchley addresses key requirements early blockchain adopters are demanding:

• An open interoperable platform.
• Features including identity, key management, privacy, security, operations management and interoperability that are integrated.
• Performance, scale, support and stability.
• Members-only consortium blockchains that are permissioned networks for members to execute contracts.

Microsoft's blockchain capabilities are being delivered via its Azure public cloud via various open protocols including simple, Unspent Transaction Output-based protocols (UTXO) such as Hyperledger, as well as smart contract-based protocols such as Ethereum and others as they surface, Gray noted.

At the recent Build conference, Microsoft with its partner ConsenSys announced support for the Ethereum contract programming language Solidity as an extension to Visual Studio, Redmond's flagship integrated development environment (IDE). Ethereum is an open source project that allows applications to run precisely as programmed with no way for third parties to interfere or create fraudulent transactions, according the Ethereum Foundation.

The applications run on a custom-built blockchain, which in Microsoft's case is the service built on Azure with ConsenSys to offer Ethereum Blockchain as a Service (EBaaS). "What you are seeing is Microsoft tactically reducing the barriers to entry to build these types of applications," said Andrew Keys, director of business development at ConsenSys. Additionally, Project Bletchley will extend Azure BaaS to other platforms, partners and customers, according to Gray.

Posted by Jeffrey Schwartz on 06/24/2016 at 1:01 PM